Empirical evidence shows that the short-run Phillips curve was vertical during the 1950s and 1960s.

Question

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Empirical evidence shows that the short-run Phillips curve was downward sloping during the 1950s and 1960s, as there was a trade-off between inflation and unemployment. It was not until the 1970s when economists began to observe a positive relationship between inflation and unemployment, leading to the development of the idea of a vertical or nearly vertical Phillips curve in the short run.

Empirical Evidence Shows That the Short-Run Phillips Curve Was Vertical